Huawei Passes Apple As 2nd Largest Smartphone Seller

Houston, Texas, USA: Chinese smartphone maker Huawei has toppled Apple Inc. (AAPL) for the first time to become the world’s second largest smartphone seller, according to reports by several research firms. Huawei also narrowed the gap with market leader Samsung.

International Data Corp., IHS Markit, Counterpoint, and Canalys have all reported that Huawei toppled Apple to take the second spot in the second quarter of 2018, ended June 30.

“According to the latest ranking of IDC, Canalys, SA & Counterpoint, HUAWEI becomes World’s Second Largest Smartphone company in Q2 2018. Thanks to everyone’s support and love,we will keep continuing innovation and bringing better products in the future.” Huawei wrote acknowledging the reports.

According to preliminary data from the International Data Corp. or IDC, Huawei’s arrival in the second position marked the first quarter since the second quarter of 2010 where Apple has not been the number one or two smartphone company in terms of market share.

Huawei delivered shipments of 54.2 million units to move into the second position with a record high market share of 15.8 percent, up from shipments of 38.5 million units in the year-ago quarter.

iPhone maker Apple shipped 41.3 million units in the quarter, compared to 41.0 million units in the prior-year period. The company’s market share rose slightly to 12.1 percent in the quarter, according to IDC.

Samsung sold 71.5 million units in the second quarter, down 10.4 percent from the year-ago period.

“The continued growth of Huawei is impressive, to say the least, as is its ability to move into markets where, until recently, the brand was largely unknown,” IDC’s Ryan Reith stated.

IDC noted that Huawei’s P20/P20 Pro series devices found strong demand in the $600-$800 price segment, helping the company build a high profile in the market. In the second half, with the release of its “GPU Turbo” technology, Huawei continued to earn a good reputation.

Research firm Canalys also attributed Huawei’s performance to strong sell-in of its latest flagship, the P20, and the success of its Honor sub-brand.

Mo Jia, a Canalys analyst based in Shanghai said, “Despite its failure to strike a U.S. carrier partnership earlier this year, the company has turned around quickly, moving away from its drive for profitability and focusing on finding volume growth at the low end.”

Research firms Counterpoint and IHS Markit also reported that Huawei leapfrogged Apple to take second place in the quarter.

The Chinese brand has been on an upward trajectory for a long time now, coming a long way from being a white-label manufacturer. So just how did the company manage to streak past Apple?

“Huawei achieved this by launching smartphones in the premium segment and capturing the mid-tier segment with its fast-growing Honor sub-brand,” said Counterpoint associate director Tarun Pathak. The representative added that Honor was already a force in the e-commerce space and was now focusing on offline expansion as well.

IDC concurred, noting that the Honor sub-brand was helping the manufacturer achieve its goals.

“618 promotions led to strong sales for Honor models in the online channels as the Honor brand continues to be a key driver of growth for the Chinese tech giant,” the tracking company wrote.

IDC also pointed to the P20 and P20 Pro‘s “strong demand,” allowing the firm to grow in the premium price bracket.

Huawei’s number two spot also comes on the back of record shipments and market share in its home country. According to a Q2 2018 report by Canalys, Huawei has the highest market share for a brand in China since Q2 2011 (27 percent). The manufacturer also smashed the record for most units shipped in a quarter, at 28.5 million devices.

In a rather interesting twist, the Honor sub-brand was actually responsible for more units shipped in China than the Huawei brand itself. In fact, Honor was one percentage point ahead of Xiaomi when it came to Chinese market share, the tracking firm noted.

Huawei managed to achieve its goal without much help from the U.S. The Chinese brand was originally set to announce a partnership with U.S. carriers at CES 2018, but the deal was canceled at the last minute, reportedly due to pressure from the U.S. government. It makes you wonder what kind of numbers the company could have achieved otherwise.

Apple (AAPL) today helped to lead the way higher on Wall Street, with the iPod and iPhone maker jumping by 5.5 percent on the day.

The rally by Apple comes after the company reported better than expected fiscal third quarter results and provided upbeat guidance.

Positive sentiment may also have been generated by a report from payroll processor ADP showing private sector employment in the U.S. increased by much more than expected in the month of July.